US and Indian trade negotiators opened two days of discussions on Wednesday as both sides seek progress toward a long-delayed agreement, despite heightened geopolitical strains following Washington’s imposition of steep tariffs on New Delhi over its purchases of Russian oil.

The United States introduced 50% duties on most Indian goods in August, arguing that India’s import of discounted Russian crude was helping fund Moscow’s war in Ukraine.

Deputy US Trade Representative Rick Switzer’s visit comes just a week after Indian Prime Minister Narendra Modi hosted Russian President Vladimir Putin in New Delhi. India’s foreign ministry, however, described Switzer’s trip as “familiarisation meetings.”

India was among the early countries to begin trade negotiations after former US President Donald Trump rolled out sweeping global tariffs, but it remains one of the few major economies yet to reach a deal—raising risks for jobs, exports and overall economic growth.

What’s at stake

India, the world’s fastest-growing major economy, recorded a $45.8 billion goods trade deficit with the United States in 2024.

Although key export sectors like smartphones and generic pharmaceuticals are exempt from US tariffs, labour-intensive industries—including textiles, seafood, and gems & jewellery—are facing severe pressure.

Exports to the US plunged nearly 12% year-on-year in October, with some categories seeing declines of 37–60% between May and September, according to the Global Trade Research Initiative (GTRI).

The fallout is rippling through financial markets as well: foreign investors have pulled out over $16 billion from Indian equities this year, contributing to the rupee sliding past 90 per dollar to a record low.

The International Monetary Fund has also trimmed India’s 2026–27 growth forecast from 6.4% to 6.2%, assuming the US tariffs remain in place.

GTRI estimates that India’s total exports could fall to $49.6 billion this fiscal year from $86.5 billion last year, potentially shaving up to 80 basis points off GDP growth.

The role of Russian oil

India enthusiastically bought discounted Russian crude after the 2022 invasion of Ukraine as Moscow was hammered with severe sanctions including on its sale of oil.

But Trump’s decision to link trade policy to geopolitics upended US-India relations in August, with roughly half of the tariff burden stemming from Washington’s attempt to penalise those purchases.

The US president has repeatedly claimed India either plans to stop, or has already mostly stopped, buying Russian oil — a claim New Delhi has neither confirmed nor denied.

But when in the Indian capital, Putin offered to “continue uninterrupted shipments of fuel”. Modi did not comment directly on oil flows.

However, top buyer Reliance Industries said in November it stopped importing Russian oil for its export-focused refinery, while smaller refiners like HPCL-Mittal Energy have said they have stopped entirely.

Analysts at trade intelligence platform Kpler expect a “notable dip” in India’s December–January imports.

Whether that decline will sway Washington is unclear.

Other issues

Talks also stalled over agriculture, with India resisting pressure to cut tariffs on staples like rice and wheat — wary of angering its farmers, a politically powerful constituency.

A senior Indian commerce ministry official told AFP that these issues are “largely resolved”, although Trump on Monday also criticised the country for “dumping” rice into the United States.

Negotiating a trade pact is complicated by the need to address Trump’s so-called reciprocal tariffs, though both tracks are linked, officials say.

“These are two separate, parallel negotiations that are going on, but one will feed into another,” Commerce Secretary Rajesh Agrawal told an industry event last week.

Is a breakthrough likely?

Relations have improved since August, with several smaller deals advancing.

That includes US approval in November for two arms sales worth nearly $93 million, and New Delhi’s “significant” deal for the United States to supply nearly 10 percent of its liquefied petroleum gas (LPG) imports.

Energy commitments have anchored past US trade deals, and experts say the LPG contract may help convince Washington that India is reducing its reliance on Russia.

• Thailand, Cambodia dispute demarcation of their 800km border.
• Both sides blame each other for instigating the renewed fighting.
• Latest clashes expand to five provinces of both countries. 

BANGKOK: More than 500,000 people have fled their homes to safety in Thailand and Cambodia since the start of a reignited border conflict, both governments said on Wednesday, surpassing the total number evacuated during similar clashes earlier this year.

“Civilians have had to evacuate in large numbers due to what we assessed as an imminent threat to their safety. More than 400,000 people have been moved to safe shelters,” across seven provinces, Thai defence ministry spokesperson Surasant Kongsiri told reporters at a news conference.

“We want to prevent a recurrence of the attacks on civilians we suffered in July 2025.”

In Cambodia, “101,229 people have been evacuated to safe shelters and relatives’ homes in five provinces,” as of Tuesday evening, defence ministry spokeswoman Maly Socheata told reporters.

The Southeast Asian neighbours dispute the colonial-era demarcation of their 800-kilometre (500-mile) frontier, where competing claims to historic temples have spilt over into armed conflict.

This week’s clashes are the deadliest since five days of fighting in July that killed dozens and displaced around 300,000 on both sides of the border before a shaky truce was agreed, following intervention by US President Donald Trump who co-signed a truce between a Cambodia and Thailand in October during a visit to Asia.

Both sides blame each other for instigating the renewed fighting, which on Tuesday expanded to five provinces of both Thailand and Cambodia, according to an AFP tally of official accounts.

Trump’s call

Meanwhile, reacting to the latest violence, President Trump has said that he was planning to “make a phone call” on Wednesday about the renewed clashes between Thailand and Cambodia over their contested border.

During a rally speech to supporters in the northeastern US state of Pennsylvania on Tuesday, Trump listed various conflicts he has become involved with diplomatically, concluding with: “And I hate to say this, one named Cambodia-Thailand, that it started up today.”

“Tomorrow, I have to make a phone call, and I think they’ll get it,” he continued.

“Who else could say, ‘I’m going to make a phone call and stop a war of two very powerful countries’?”

• Japan scrambles jets to monitor Russian-Chinese patrols.
• Joint flight seen as show of force, says Japan’s defence minister. 
• China-Russia military cooperation increases across region.
  

TOKYO/MOSCOW: Japan has scrambled jets to monitor Russian and Chinese air forces conducting joint patrols around the country, the Japanese defence ministry said late Tuesday, amid rising tensions between Tokyo and Beijing.

Two Russian Tu-95 nuclear-capable strategic bombers flew from the Sea of Japan toward the East China Sea to rendezvous with two Chinese H-6 bombers, and performed a “long-distance joint flight” in the Pacific, the ministry said.

Four Chinese J-16 fighter jets joined the bombers as they made a round-trip flight between Japan’s Okinawa and Miyako islands, it added. The Miyako Strait between the two islands is classified as international waters.

Japan also detected simultaneous Russian air force activity in the Sea of Japan, consisting of one early-warning aircraft A-50 and two Su-30 fighters, the ministry said.

Japanese Defence Minister Shinjiro Koizumi said in a post on X on Wednesday that the Russian and Chinese joint operations were “clearly intended as a show of force against our nation, which is a serious concern for our national security.”

Japan’s fighter jets “strictly implemented air defence identification measures,” Koizumi added.

Russian news agencies reported that the Russian-Chinese joint flight near Japan lasted for eight hours, citing Moscow’s defence ministry.

South Korea’s military also said on Tuesday that seven Russian planes and two Chinese planes had entered its air defence zone.

Japan said on Sunday that Chinese carrier-launched fighter jets aimed radar at Japanese military aircraft a day earlier, an account Beijing disputed.

Beijing’s rising military actions near Japan follow Japanese Prime Minister Sanae Takaichi’s comment last month that Tokyo could respond to any Chinese military action against Taiwan that also threatened Japan’s security.

China and Russia have been ramping up military cooperation in recent years elsewhere, conducting joint operations such as an anti-missile training on Russian territory and live-fire naval exercises in the South China Sea.